Old story, the only thing I'd like to know is if a solution has been found. I thought a RED-based algorithm was the way to go, but it has actually been implemented in modern network switches/routers?
CoDeL is solution which has come out from all of this: http://www.bufferbloat.net/projects/codel/wiki - it can operate without any tuning, as it starts dropping packets when they start spending too much time in the queue.
RED has too many tunables and overfits for a single traffic profile. Fair queuing CoDel just needs a bit more testing to become the Linux default (the current default is a fifo, which is horrible but simple). In addition to that, a lot more work is required to eliminate dark buffers in wireless drivers and other places.